How Does Payment History Affect Your Credit Scores?

Learn about how on-time and late payments can impact your credit scores


When it comes to paying bills, timing is everything. That’s because your payment history is an important factor used to calculate your credit score. Lenders and creditors use your credit score to make decisions about offering you things like credit cards, auto loans and mortgages. 

But what exactly is payment history? How can it impact your credit score? And how can you improve your payment history? Read on for the answers to these questions and more.

What Is Payment History?

As the Consumer Financial Protection Bureau (CFPB) explains, credit reports include financial information submitted by creditors like lenders and credit card companies. And your payment history is an important part of your credit report. It shows payment information about your credit accounts and might include things like

  • The number of accounts you’ve paid on time.
  • How much money you owe to delinquent accounts or collections. 
  • How long overdue your payments are or have been in the past.
  • The number of times that past due items appear in your credit history.
  • How much time has passed since you’ve had delinquencies, collections items or bankruptcies. 

What Kinds of Accounts Are Considered in Payment History?

The types of accounts that can influence your payment history may include

  • Credit cards.
  • Installment loans like auto loans, mortgages and student loans.
  • Consumer finance company loans.

Bankruptcies, wage attachments and lawsuits are also considered with your payment history and can negatively impact your credit score.

How Does Payment History Impact Credit Scores?

Remember, your credit score gives lenders an idea of how likely you are to pay back your loans. This might explain why your payment history is an important factor used to calculate your score. And the better your payment history, the better your credit score might be.

Keep in mind that there are many credit scores out there, each with its own scoring model. FICO® and VantageScore® provide some of the most commonly used credit scores. 

How those companies calculate scores may differ. But their calculations are based on much of the same information from your credit report—including your payment history.

How Long Can Negative Information Affect Credit Scores?

Negative information in your payment history could affect your credit score for years. Just how long depends, but the CFPB explains that negative information can generally stay on your credit report for up to seven years.

Some negative information—like bankruptcies, lawsuits or judgments against you—can stay on your report for even longer. But depending on the scoring model, older negative information may count less than more recent information. And negative information with smaller dollar amounts could count less than negative information with larger amounts. 
 
Keep in mind, negative information like late credit card payments could come with other consequences, including late fees and interest rate increases. And if you don’t pay on time, you might not be able to use your card for new purchases until your account is current. You should check your credit card’s terms and conditions and your customer agreement to understand how you could be impacted by a late payment by your issuer.

When a credit card account goes 180 days—a full six months—past due, the credit card issuer must close and charge off the account. And some issuers may charge off overdue accounts sooner.

Charging off an account means that it’s permanently closed and written off as a loss to the company. But the debt is still owed.

Are There Ways to Help Improve Your Payment History?

If you don’t have the greatest payment history, you can always work to improve it. These tips may help:

Pay Bills on Time

Paying your bills may feel like a struggle when money’s tight. But paying bills on time is the best way to start getting your payment history back on track. You might set up a budget, automatic payments or reminder alerts to help you.

Bring Your Accounts Current

Remember, older negative information may affect your credit score less than more recent negative information. So the longer you pay your bills on time, the better it is for your payment history. And the better it could be for your credit score. Making the minimum payment on credit accounts—like your credit card—may help keep your account current and in good standing.

Contact Your Lenders and Creditors

If you’re struggling to pay bills, consider getting in touch with your lenders for help. Credit card companies, for example, work every day with people who can’t pay their bills. They may be able to work with you if you’re concerned you might miss upcoming payments.

And if you’re a Capital One customer and having trouble making payments, you should contact Capital One directly to discuss potential options. 

Monitoring Your Credit

It’s a good idea to monitor your credit as you work to improve your payment history. And while your credit score may paint a general picture of your creditworthiness, a full credit report can offer much more detail. 

Learn how to get free copies of your credit reports from all three major credit bureaus—Equifax®, Experian® and TransUnion®—by calling 877-322-8228 or visiting AnnualCreditReport.com.

And with CreditWise from Capital One, you can access your free TransUnion credit reports and weekly VantageScore 3.0 credit score anytime, without negatively impacting your score. You can even see the potential impacts of financial decisions on your credit score before you make them with the CreditWise Simulator. CreditWise is free and available to everyone—not just Capital One customers.


Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention

Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many scoring models used by lenders. It likely won’t be the same model your lender uses, but it is an accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web. The tool is not guaranteed to detect all identity theft.

The CreditWise Simulator provides an estimate of your score change and does not guarantee how your score may change.

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